Greece's cash-strapped government is proposing to end increase taxes m the country's key shipping sector in order to boost revenues, but some shipping owners are threatening to move their ships abroad as a result, says a report in BBC.
The Greek shipping fleet has since become the biggest in the world, with almost 4,000 ships representing 19% of global shipping capacity. It contributes more than 7% towards the struggling economy, but the country's creditors say it can do more.
Greece’s vital maritime industries have managed to stay afloat through six years of economic turmoil, with shipping making up 7.5 per cent of the country’s economic output.
Greece controls 19 per cent of the oceans’ dry bulk carriers and almost a quarter of the oil tankers — the largest merchant fleet in the world.
The industry currently pays no tax on international earnings brought into the country under rules incorporated into Greece's constitution in 1967.
But since July, when the government proposed to increase shipping taxes and to end other privileges due to pressure from the EU and other international creditors, ship owners have been threatening to move their businesses abroad.
Any Greek shipping companies that do leave may not have to venture far, with nearby Cyprus styling itself as a prime destination for them to set up home.
According to Iraklis Prokopakis, COO of Danaos Corporation, shipping companies based in Greece can’t afford to pay a single cent of tax more, as they are already among the highest taxed worldwide, after the recent introduction of an increased tonnage tax scheme, which will yield an extra 110 million euros per year until 2017.